Feb. 28, 2014
Statement by John Maginnis, Blue Cross and Blue Shield of Louisiana spokesman
In the past three weeks, we have received several inquiries about our policy against accepting third-party payments for individual policyholders’ health insurance premiums.
Several media reports have incorrectly framed this policy as affecting only the Ryan White program members with HIV/AIDS who are using federal funds to pay for their health coverage. This policy applies to all individual policyholders across the board. For us, the real issue is not any group of people but the escalated potential for fraud and abuse when third-party payments are allowed.
We are a mutual company owned by our policyholders; and we keep less than 3 cents of every premium dollar for our reserve fund. Because of this, every penny we spend affects other policyholders’ premiums. We are strong believers that we are the stewards of our policyholders’ money and, as such, we are obligated to fight fraud and abuse every day.
We have seen in the past that a large percent of this abuse stems from third-party payments. In fact, this type of fraud or abuse costs the industry millions each year. This is why we are declining to enter in to this type of payment arrangement.
We are in no way suggesting that the Ryan White program has been involved in anything improper. But unfortunately, we cannot have an effective anti-fraud and abuse policy if we pick and choose which individuals must follow it and which ones don’t have to.
Why is this coming up now?
The ACA (healthcare reform law) has drastically changed the health insurance landscape, opening the market up to millions of new customers and creating uncertainty of how things will be from this point forward. Unfortunately, this means there is more potential than ever for those who wish to manipulate this uncertainty for their own selfish financial motives to do so. We are doing everything we can to protect our customers’ money.
How does this fraud or abuse work?
Imagine you have just been diagnosed with a serious medical condition and told you need immediate medical treatment. A clinic, equipment supplier, pharmaceutical company or other third party offers to pay a few hundred dollars a month to cover your health insurance premium so you can get it. Vulnerable, you accept. Then, that party not only gets to decide which insurance plan, medications and services you get, it turns around and bills your insurance for millions of dollars in claims for treating your condition. Once you’ve had your treatment, the third party could either quit paying your premium, which means your policy gets canceled, or leave you stuck in a health plan that is wrong for you.
Sadly, this is a real example of the types of abuse that can happen through third party payments, which lead to wasted money and severely limit patients’ ability to make their own healthcare choices. And, the value of letting people pick their own plans cannot be understated – the individual mandate that nearly everyone has to have health insurance or pay a penalty means we have many first-time buyers. They deserve the opportunity to choose a plan, not be pushed or intimidated into a plan someone else chose for them.
That is why we made the business decision to enact a policy against accepting third-party payments once healthcare reform was in effect. We have included a ban on third-party payments in our members’ contracts since 2012, stating that we will only accept premium payments from the policyholder or an immediate relative (by blood or marriage) of the policyholder. Most of our policyholders are already complying with this policy. But, in the past, we did accept some third-party payments, including payments from the Ryan White program and others.
Now, to strengthen our protections against fraud and abuse, we will enforce the ban on third-party payments for all policyholders, regardless of their health status, type of plan or previous method of payment. This policy has no effect on anyone’s coverage, benefits or level of service. It is simply a change in how we can accept payment.
We strongly feel that this policy is in the best interest of our current and future policyholders, to protect the financial stability of our company and our customers’ premium dollars. After all, when a small number of people commit fraud and abuse, it’s all of our policyholders’ money that is wasted.
In the end, we must uphold the protection we owe all of our 1.4 million customers.
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